Sale of Property

Sale of Property

Have bought a propert in 1992 for 4 lakhs and sold for 30 lacs in 2018. Now am investing the sale proceeds to buy a new residential property of 55 lacs

the difference amount (25 lacs)is being managed from children(who are independent earners) and spouse and some from my savings.

1. Is there any capital gain tax on the transactions.
2. Can i jointly register the property with my 2 children at the time of purchase( just to avoid gift deed later)
3. will there be any other tax obligation on the money flow or point 2 mentioned.

The property bought in 1992 has indexed cost of 8 lacs as per latest indexation table.

The property bought in 1992 was in my name only.

Regards

Asked 5 years ago in Income Tax

1. There would be no tax liability. You can claim capital gain exemption under section 54 if the property sold was a land OR under section 54 F if the property sold was a residential house property.

2. Yes.

3. No.

Lakshita Bhandari

CA, Mumbai

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If you are going to invest entire 30 lakh in the new property then there won't be any capital gain tax.

Yes you can jointly register it with your two son but your share should be atleast of 22 lakh to save any capital gain tax.

If you show the amount received from son as gift also then also there won't be any tax implications.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Naman Maloo

CA, Jaipur

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Hi,

Hope you are doing well !

1. No, there will be no capital gain tax liability.

2. Yes.

3. No.

Thanks & Regards,

Payal Chhajed

CA, Mumbai

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Hi,

- As the property was purchased before 01.04.2001, it is better to obtain the FMV of the property as on 01.04.2001 from the govt. approved valuer and indexed it to calculate long term capital gain.

- Assuming house is sold in F.Y. 2018-19, indexed cost is Rs.11.20 lacs, capital gain would be Rs. 18.80 lacs. You can deduct brokerage from the sale consideration.

- Yes you can register jointly with other 2 children.

- In future any income generated from the property will be taxable among three of you according to the quantum of contribution or decided by you.

Thanks